Many Arizona retirees own property in other states, including a house, condominium, or a mobile home. When they engage in estate planning, it is important to think carefully about what will happen to such property after the retiree's death.

When a decedent's will goes through the probate process in Arizona, the court normally does not have the authority to allow the executor or administrator of the estate to transfer the title to this out-of-state real estate to the heirs or beneficiaries.

Instead, it may be necessary to also subject the will to probate in the other state where the real estate is located. Such "ancillary probate" can be an expensive proposition, sometimes costing as much as two or three times the expense of probate of a will in Arizona.

This problem usually does not affect personal property such as a car, mobile home, or bank account in another state. Occasionally, however, a state motor vehicle department will not obey a court order to transfer a car title from an Arizona court, requiring a separate probate court proceeding in that state.

These problems can be avoided by a revocable living trust, with the title of all of the individual's property, including out of state property, transferred to the trust. After the individual's death, the trustee is able to transfer all of the property to designated beneficiaries directly, avoiding the need for probate in either Arizona or any other state.

A revocable living trust allows the individual to choose which state's law governs, which is a benefit if a person lives more than six months of the year outside of Arizona, thereby arguably making them a resident of the other state. With a revocable living trust, they can still choose to have their property governed by Arizona law.

Source: The Times Herald, "Snowbirds: Be careful when planning your estate" Matthew Wallace, Aug. 28, 2011